Zane Benefits Publishes New Information on Defined Contribution Health Benefits

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Defined Benefit vs. Defined Contribution Healthcare

Today, Zane Benefits, the number one online small business health benefits solution, published new information on defined contribution healthcare.

According to Zane Benefits’ website, the health insurance industry is transitioning away from defined benefit healthcare and towards defined contribution healthcare. But what do these terms mean and how are they different?

With defined contribution healthcare the employer sets the specific amount contributed (but doesn't dictate the exact heath benefit).

Defined benefit healthcare is the traditional way to think about employer health insurance. A company provides its employees with a defined healthcare benefit -- doctor visits, hospitalization, pharmacy and so on -- often at uncertain annual cost.

The benefit is administered through an employer-sponsored group health benefits plan.

Defined benefit and defined contribution healthcare are often compared to retirement benefits. Using this reference, a defined benefit would be a pension-style retirement plan.

Defined contribution healthcare is a new way to think about employer health insurance. In it's purest form, a company provides its employees with a health insurance allowance or "contribution" to spend on their own healthcare -- at an annual cost that the company controls. Think of defined contribution like a stipend, or a gift card, to use for health insurance.

The benefit is administered through a defined contribution software provider and may or may not include a private exchange.

Using the same comparison to retirement benefits, defined contribution healthcare would be the 401(k)-style retirement plan.

Just as there are many variations of defined benefit healthcare (various ways to structure the group health benefits plan), many variations of defined contribution healthcare are popping up because they are an effective way to control cost.

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About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHealth") for defined contribution health care. The flagship software provides a 100% paperless administration experience to small businesses and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about Zane Benefits, visit

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Christina Merhar
Zane Benefits
+1 (800) 391-9209 Ext: 6725
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